CIPS L4M8 Exam - Topic 1 Question 50 Discussion

Actual exam question for CIPS's L4M8 exam

Question #: 50
Topic #: 1

[All L4M8 Questions]

Describe three types of fraud that could occur within the supply chain of an organization with which you are familiar.

AExplanation:
Fraud occurs when a person acts deliberately to secure monies from another party through dishonest method. Within the supply chain of an organization, fraud can represent itself in the following ways:
1. Kickbacks: e.g. (commission given to a bribe taker for service perform)
2. Corrupt influence (e.g ordering more than what is required)
3. Collusion: (group of suppliers working together to submit multiple bids and split profit.
4. Bid Rigging (a contract is informally agreed with a chosen supplier prior to the official process
5. invoicing fraud
6. Substitution (submitting products that are below the required quality
7. False claims (files false document)
Case Study
A series of news stories reporting events such as the collapse of the Rana Plaza building in 2013 have drawn attention to the poor conditions in garment factories across India and South East Asi
a. Human rights groups have long be critical of the excessive hours and poor wages workers are forced to endure, as well as the abuse they receive from supervisor. With consumers becoming increasingly aware of these conditions, more pressure is being put on global brands and retailers to ensure their supply chains are fair and ethical.
Certain areas have been notorious for the mistreatment of workers. In India's textile valley', young women are been bound into contracts where they work for two to three years, in exchange for a lump sum of money that they can then put towards a dowry. This is known as the 'Sumangali [a married woman] Thittam' scheme. These women are forced to live in hostels under restrictions that prevent them from moving, and are denied the opportunity to improve their living conditions. Retailers including Walmart and H&M are known to source garments from factories in the 'textile valley'.
Reports by organizations including the Asia Floor Wage Alliance (AFWA), Central Combodia, Global Labor Justice, Sedane Labour Resource Centre (LIPS) Indonesia, and Society for Labour and Development (SLD) India have exposed unethically run factories that supply garments to H&M, Gap and Walmart. However, retailers will continue to benefit from expensive labour until mounting customers pressure causes them to change.

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Suggested Answer: A

by Alonso at Nov 18, 2024, 06:33 PM

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Mari

3 months ago

Invoicing fraud is a huge issue too, can't believe it's still happening!

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Annette

3 months ago

Wait, are retailers really benefiting from this? Seems shady.

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Felicia

3 months ago

I've heard of bid rigging, but collusion? That's wild!

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Leigha

4 months ago

Totally agree, it's all about profit over ethics.

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Isaiah

4 months ago

Kickbacks are super common in supply chains!

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Bobbie

4 months ago

I definitely remember the Sumangali scheme from our case studies. It really highlights the ethical issues in supply chains, especially with companies like H&M and Walmart involved.

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Casie

4 months ago

I feel like invoicing fraud is pretty common, but I’m not confident about how it specifically affects the supply chain.

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Wilda

4 months ago

I think collusion is a big issue, especially when suppliers work together to manipulate bids. I practiced a question on that last week, but I can't recall all the details.

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Gerald

5 months ago

I remember studying about kickbacks in supply chains, but I'm not entirely sure how they would be implemented in a real-world scenario.

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Ona

5 months ago

This is a great question! I've actually studied supply chain fraud in one of my business courses, so I feel pretty prepared. I'll make sure to hit on the key types like kickbacks, collusion, and false invoicing, and I'll try to provide some real-world examples to illustrate my points.

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Delpha

5 months ago

Ugh, I'm not sure I'm totally comfortable with this question. Supply chain fraud seems like a complex topic, and I'm worried I might miss some important examples. I'll do my best to come up with a solid response, but I'm not feeling super confident about it.

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Stefanie

5 months ago

Okay, I've got a few ideas for this. Kickbacks and false invoicing seem like obvious ones. But I also want to make sure I cover some more subtle forms of fraud, like substituting lower quality products. I'll need to dig into the details on that.

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Maryann

5 months ago

Hmm, this is a tricky one. I'll need to really think through the different ways fraud can occur in the supply chain. Maybe I'll start by considering the different stages and stakeholders involved.

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Marla

5 months ago

I think I can handle this question. Identifying types of fraud in the supply chain seems straightforward, and I'm familiar with some common examples like kickbacks and collusion.

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Lashunda

1 year ago

Fraud in the supply chain - it's like a game of 'hide and seek,' but the only prize is a hefty lawsuit and a tarnished reputation. Gotta keep those suppliers on their toes!

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Sang

1 year ago

I can't believe some companies still engage in these unethical practices.

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Sang

1 year ago

Yeah, kickbacks, collusion, bid rigging - it's like a never-ending cycle of deceit.

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Sang

1 year ago

It's crazy how many different ways fraud can happen in the supply chain.

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Rasheeda

1 year ago

Kickbacks and bid rigging are common types of fraud in supply chains.

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Craig

1 year ago

Substitution is the worst. Imagine getting a lower-quality product than what you ordered - that's a recipe for disaster. Might as well just buy from the dollar store!

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Benedict

1 year ago

User 3

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Benedict

1 year ago

User 2

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Mignon

1 year ago

User 1

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Albina

1 year ago

Invoicing fraud and false claims are just sneaky ways for suppliers to rip off the organization. They must think we're all idiots or something!

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Kris

1 year ago

Collusion and bid rigging are also big problems. It's crazy how some suppliers work together to rig the bidding process and split the profits.

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Ellen

1 year ago

Transparency and accountability are key in ensuring a fair and ethical supply chain.

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Bettyann

1 year ago

Absolutely, it's important for organizations to have strict policies in place to prevent such fraudulent activities.

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Miss

1 year ago

It's unethical for suppliers to work together like that just to make more money.

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Naomi

1 year ago

Yes, collusion and bid rigging can really harm the organization's supply chain.

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Zachary

1 year ago

I agree, it's important for organizations to be ethical.

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Sabine

1 year ago

Kickbacks and corrupt influence seem like the most common types of fraud in the supply chain. I've heard stories of suppliers trying to bribe procurement managers to get their products ordered.

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